[r79] In Lehman's Terms 3/15/09 (3/15/2009)

Sunday, March 15, 2009

Start Date:

3/15/2009

All Day

End Date:

3/15/2009

STATEHOUSE (March 15, 2009) - I want to take this opportunity to talk about the property tax caps. The 1-, 2- and 3-percent caps have been and will most likely be the most-talked-about issue this session.

The caps are contained in Senate Joint Resolution 1, a proposed amendment to the Indiana Constitution, and they would limit property tax bills to 1 percent of the property's assessed value for homesteads, 2 percent for residential rental property and farmland and 3 percent for all other property.

To become part of the Indiana Constitution, an amendment must be passed by two consecutive, separately elected sessions of the General Assembly and by Hoosier voters in the next general election. Both the House and the Senate passed the property-tax cap resolution last session, each chamber giving the caps bipartisan support. The Senate, with a bipartisan majority, passed SJR 1 earlier this session.

The last day for action this session is April 15, the deadline for third readings of bills.

As I write this, I am thinking of what talking points need to be discussed, and I have concluded that I don't really need talking points at all. I just need to talk. (Or type as the case may be).

When I was on the Adams County Council, I watched our county budget increase and flatten out, then increase again and, over time, the budget was quietly taking more and more of the taxpayers' money.

Every so often, we would add a new program because, as the logic went, the "state is paying half the cost for X amount of years" When X amount of years were up, the program would silently rolled on to our tax rolls.

The programs themselves were fine. In fact, many were even excellent programs with positive results. But, you really need to step back sometimes and ask, "What is the responsibility of local government?"

What I observe from the state level is that the caps that were passed into law last year have forced municipalities to ask that question and also review what services can be combined or shared by other entities.

It is this discussion that will ultimately help the taxpayers of Indiana. The ideas coming out of those discussions will help the taxpayers of Indiana, and so will the actions of these leaders.

And I truly believe the goal of all elected officials is to manage a clean and efficient government that helps the taxpayers of Indiana.

Are the 1, 2 and 3 the right percentages? What about farmland valuation? What about projects that are allowed outside the caps?

Let me take the last one first. When the caps were passed, the law also included a new layer of taxpayer protection - the referendum. If a project is proposed that would exceed a set limit and is to be outside the caps, then the project is subject to a referendum.

Not a remonstrance process, in which there can be confusion and possibly intimidation. It would be up to the voters in secret to decide.

One problem: The Democrat-controlled House earlier this session passed House Bill 1730. On its surface, HB 1730 appears to encourage "green technology" for public construction projects. So far so good.

But HB 1730 also allows those projects to be built without going through the referendum process. So this would allow a school or municipality to build a $10 million dollar project, and if they use energy-efficient light bulbs, the taxpayer will foot the bill with no course of action to stop it. And energy-efficient technology, as important as it might be, is usually more expensive.

Then there is farmland. There is not enough room in the newsletter to fully explain why the caps are not the poison some believe they will be. Agricultural property is not assessed the same as other property; it is subject to its own valuation.

The only thing that will change the value is the formula that is being used, and the current formula does not include the cap issues. The law also states that if a governing body loses money because of one cap, it cannot reassess the other levels to replace the lost revenue. They must figure out a way to spend less money.

The biggest problem right now is that we cannot debate this issue. House Speaker Pat Bauer has decided not to give SJR 1 a hearing.

Some members are eager to vote. I want to talk about it. I want us to wrestle with the issue, look at all sides, debate the pros and cons and, at the end of the day, I want to know that we talked and debated while doing the people's business. I want Speaker Bauer to bring the bill to the floor so at least we can talk about it.

I would love to discuss this further. If anyone wants to talk about the caps, please call me at 1-800-382-9841 or e-mail me at H79@in.gov.